Exam 1 Study Guide
Exam 1 Study Guide MKTG301
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This 8 page Study Guide was uploaded by Lisa Thein on Monday February 8, 2016. The Study Guide belongs to MKTG301 at Pennsylvania State University taught by Coupland in Fall 2015. Since its upload, it has received 62 views.
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Date Created: 02/08/16
MKTG301–E XAM 1 STUDY GUIDE P ROF.C OUPLAND /TA’S:P ATRICK BURKE &N ICK BARONE FALL 2015 INTRO/WHAT IS MARKETING? § What is marketing? o Fundamentally understanding what the customer needs and wants o The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return § Customer relationships are long term § Marketing is like gardening – you develop a relationship of growth in which you understand your customer • Ex: Amazon obsesses over their customers § The marketing concept o Types of products § Physical objects, people, organizations, places, information, ideas • Ex: Papa John’s commercial selling the concept that pizza goes with football, their relationship with the NFL, family friendly o Types of customers § Suppliers à company/competitors à marketing intermediaries à consumers § Final consumer – the one who is using it for personal use § Peyton manning would be a marketing intermediary § Sales concept § § Product concept – think that their product is so good they don’t need to advertise or do research for it o consumers will prefer products that have better quality, performance and features as opposed to a normal product. § Applicable in niches such as electronics and mobile handsets. § Production concept – consumers prefer goods that are cheap and widely available § Marketing myopia o Narrow minded o Miss out on trend changes, needs, or wants o Ex: BIC too focused on selling concept and tried selling perfume, but people didn’t want that § Societal marketing c oncept Page 1 of 8 o Ex: Starbucks – meet me at Starbucks campaign; McDonald’s – trying to get back to their roots by demonstrating how they’re part of the community § The marketing mix o How markets implement marketing strategy o Product – what do potential customers need/want o Price – how much should we ask customers to pay o Place – how will we get it to the customer o Promotion – how will we communicate with the customers § Marketing process model o Steps in the process: o Consumer touch points – ways in which a company reaches the customer § Ex: McDonald’s commercial § Building and capturing customer value o Customer loyalty and retention – results from superior customer value o Customer equity § Overall value of the brand, value of that brand based on customer lifetime values § Customer lifetime value – stream of purchases a customer make s over their lifetime for a certain brand o Consumer generated marketing § Ex: Jet Blue has developed a super loyal following o Customer relationship groups § True Friends – high profitability, high loyalty § Butterflies – high profit, but low loyalty § Barnacles – always loyal, but not profitable § Strangers – not profitable or loyal o Customer managed relationships – Uses technology to implement strategies aimed at helping companies acquire new customers, sell more to current customers, analyze the effectiveness of marketing activities, and provide better customer service. o Customer evangelists – believe, preach, and de vote themselves to certain products MARKETING ENVIRONMENT § What is the marketing e nvironment; why is it important Page 2 of 8 o The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers o Studying the environment allows marketers to: § Understand the constraints they operate under § Learn of opportunities § Reveal threats to avoid combat § Actors in the microenvironment o The company § All departments must: • Think consumer • Cooperate inter-functionally to provide superior customer value and satisfaction o Everyone on the same page § Ex: apple vs Microsoft o Suppliers § Provide resources needed for production and innovation o Marketing intermediaries § Help the company promote, sell, and distribute the products to end -users § Partnering with intermediaries – resellers, physical distribution firms, marketing services agencies, financial intermediaries • Coke and Wendy’s – coke shares their data o Customers, types of customers § Five basic types of buyers – consumer, business, reseller, government and non-profit, and international markets o Competitors, competitive advantage, law of color § Competitors – provide reasonable substitutes to customers § Competitive advantage – attributes that allow the company to outperform their competitors • Important to highlight your core competency - combination of knowledge and technical capacities that allow a business to be competitive. Should allow expansion into new end markets as well as provide a significant benefit t o customers. § Law of color – a brand should use a color that is the opposite of its major competitors o Publics (e.g., financial, media) § Any group that has an interest in or impact on an organization’s ability to achieve its objectives § Financial, media, gove rnment, citizen-action, local, general, internal § Ex: Tide loads of hope after Katrina § Forces in the macroenvironment o Demographic forces (e.g., household structure, population diversity, age structure) § Household structures, age structures, geographic population shifts, educational characteristics, population diversity, occupations § Age Structure: • Gen Y = entertainment and authenticity • Gen Z = makers not sharers, digital in their DNA • Baby boomers = want t o stay active • Gen X = care about environment, less materialistic § Population diversity – African American women buy 3x as much makeup § Purchasing power of the LGBT community o Economic forces (e.g., value marketing, Engel’s law, treasure hunter) § Factors that affect consumer purchasing power and spending patterns § Overconsumption à value marketing Page 3 of 8 • Ex: Target selling brand names § Treasure hunter tradeoffs – even when the economy is weak, people will still buy luxury items by saving up for them § Changes in income di stribution – upper/middle/working/under class • Stores like dollar store and nordstrom are doing well, while stores in between are struggling § Engel’s Law – as our income goes up the proportion of our money that we spend in most categories goes up, except fo r food o Natural forces § Natural resources that are needed as inputs by marketers or that are affected by marketing activities § Shortages of raw materials, increased pollution, increased government intervention, environmentally sustainable strategies o Technological forces (e.g., RFID) § Factors that create new technologies, creating new product and marketing opportunities (while making other products obsolete) § Ex: self driving car, RFID (Disney magic bands), augmented reality (QR codes) o Political forces and marketing laws (e.g., price discrimination) § Laws, regulations, and pressure groups that influence and limit various organizations and individuals in a given society § Marketing laws – protect the consumer • Fair packaging and labeling act – what, who, how much • Federal food and drug act – information can’t be fraudulent • Truth in advertising - parody or exaggeration are okay , but you have to tell the truth o South butt was only illegal when he applied for a trademark because you can’t steal someone’s idea • Sherman antitrust act – price fixing, predatory pricing • Robinson-Patman act – price discrimination is illegal o Cultural forces § Forces that affect society’s basic values, perceptions, preferences, and behavior § Cause-related marketing – cooperative efforts of a for profit business and a non-profit organization for mutual benefit § Current trends: • Hypertasking – multitasking in overdrive • Duty and fun – having fun but responsibly, playfulness • Adventurers – doing things that others wouldn’t do • Mass mingling – the more people network online, the more likely they are to actually meet up • Cocooning/nesting – wanting to spend a lot of time at home and on ones home (home depot) • American patriotism • The chore of work – declining job satisfaction & company loyalty • LOHAS – general concern for the natural world • Renewed spirituality – less materialism, greater “meaning of life”, centered MARKETING INFORMATION § What is a marketing information system Page 4 of 8 § Developing needed i nformation o Internal databases – what information do we already have? § Shopper cards that you scan in every time you purchase something o Marketing intelligence – what public information is available? § Behavioral targeting § Ex: Gatorade has social media monitoring § Law of fellowship – companies will be more profitable if th ey are near their competition (home depot & lowes gather public info from each other) o Information analysis o Marketing research § Systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization § Steps in the process • 1. Defining the problem and research objectives • 2. Developing the research plan and collecting information • 3. Implementing the research plan – collecting and analyzing the data • 4. Interpreting and reporting the findings • Ex: Pepsi vs Coke, Pepsi live for now campaign § Types of research (e.g., exploratory) • Exploratory – gathers preliminary information that will help define the problem and suggest hypotheses • Descriptive – describes things (market poten tial for a product, demographics, attitudes) o Focus groups, surveys • Causal – test hypotheses about cause and effect relationships o Research lab, different category § Primary vs. secondary data • Primary o Collect specific information o Directly applicable o Costly • Secondary o Rely on existing information o Often not as applicable o Less expensive o Ex: Lexis Nexis, Simmons – surveys on consumer behavior and brand preference , Nielsen – shopper scanner data Page 5 of 8 § Research Approaches: Observational, survey, experimental • Observational – gathering of primary data by observing relevant people, actions, and situations o Ethnographic – observation in a “natural environment” § Ex: Marriot hotel lobbies o Mechanical – people meters, checkout scanners, eye cameras • Survey – most widely used o Can gather information about people’s knowledge, attitudes, preferences, or buying behavior • Experimental – best for gathering causal information o Select matched groups of subjects o Give different treatments o Control for unrelated factors o Check differences in responses between groups § Sampling plan (simple random, convenience, judgment, quota) • Sampling unit, sample size, sampling procedure § Contact Methods: In-person, mail, phone, o nline • In-person – used for surveys and experiments, some observational research o Pros – highly flexible, good control of sample o Cons – high cost per respondent, highly subject to interviewer bias • Phone – mostly used for surveys, some experiments o Pros – gathers information fast, greater flexibility than mail surveys o Cons – higher cost than mail, interview effects exist, quantity of data collected is smaller than in mail • Email – mostly used for surveys using a questionnaire o Pros – cheap and fast o Cons – nonresponse • Online – can do surveys, experiments, and personal (individual or group) interviews o Pros – least expensive way to gather information, flexible, saves time on data processing o Cons – anonymity CONSUMER BEHAVIOR § What is consumer behavior; why is it important o Buying behavior of individuals and households who buy goods and s ervices for personal consumption o Cultural factors § Culture – the most basic cause of a person’s wants and behavior § Subculture – the culture of a group of people who share value systems based on common life experiences • Ethnic subcultures: o Hispanics – shopping is a family affair, brand names sell well, online ads o African-Americans – enjoy shopping more than other groups, the most fashion conscious , selection is important o Asian-Americans – the most brand conscious, tech savvy § Social classes – society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors § Ex: Budlight wine and cheese party (subculture) and B udwiser (culture) Page 6 of 8 o Social factors § Reference groups – include ones person belongs to, wants to identify with (“aspirational”), or does not want to be identified with (“dis associative”) • Ex: iPad vs. Kindle in sunlight § Family/household – the most important “group” for most consumer buying § Roles and status • Role – expected activities • Status – esteem given to role by society o Personal factors § Age and lifecycle stage – people change the goods they buy over their lifetimes § Occupation – influences the purchase of goods § Economic situation – some goods and services are especially income sensitive § Lifestyle (psychographics) – pattern of acting and interacting in the world (AIO: activities, interests, and opinions) § Personality and self-concept – people’s possessions contribute to and reflect their identities § VALS Framework • Innovators – high resources, high innovation • Survivors – low resources, low innovation • Ideals – philosophical, thinker, lots of beliefs, wants to change the world • Achievement – social status • Self-expression – artsy, experience the world, social skills, talents o Psychological factors § Motivation – the needs that drive people § Perception (selectivity) – the process by which people select, organize, and interpret information • Selective attention • Selective distortion • Selective retention (psu vs ohio state mascot) § Learning – changes in behavior based on experience § Beliefs and attitudes affect choices • Beliefs – descriptive thoughts • Attitudes – likes and dislikes § Moderate incongruity – show people an image that is surprising based on their expectations • Ex: carrot in banana peel, kiwi in yogur t cup, Roll Tide § Maslow’s hierarchy of needs Page 7 of 8 • Ex: physiological needs – Got Milk § Buyer Decision Process o Steps in the process & ways to respond § Need recognition • Help recognize need, suggest solution to need § Information search • Provide information conveniently § Alternative evaluation • Competitive advantage, illustrate consequences § Purchase decision • Availability, added value § Post-purchase evaluation • Reduce cognitive dissonance • Cognitive dissonance – potential to feel remorse about your purchase, buyers remorse, doubts about purchase decisions o Try to manage with testimonials, money back guarantees, after sales service, ect. 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